Last week, the Salford Star slammed City Mayor Paul Dennett over continuing secrecy and lack of transparency within Salford Council, epitomised by a Cabinet meeting this Tuesday that tried to hide details of Council dealings with Salford Red Devils owner, Marwan Koukash.
The Star predicted that this item on the Cabinet agenda which didn't even mention the Salford Reds' debt would concern extending the non-payment of historic debt by a further 12 months (see the Salford Star `award' article click here). And so it has come to pass.
The decision notice for the Cabinet meeting, published yesterday, is again clouded in secrecy and only states that the Council notice "reschedules payments from the Club to the Council", and stops any councillors from `calling in' the decision as it would "seriously prejudice either the Council's interest or the public interest".
Meanwhile, the notice adds that all "relevant documents contain exempt or confidential information and are not available for public".
However, the Star can reveal that the decision does indeed give Marwan Koukash a further 12 month payment holiday on the Council debt which, according to the latest Council accounts, stands at £1.038million (although how this figure has been calculated is anyone's guess).
On top of the previous 17 month payment holiday, agreed by former Salford Mayor, Ian Stewart in August 2015, it means that by December 2017, Koukash will have paid nothing to any creditors for almost two and a half years.
Creditors should have been receiving £25,000 a month via a CVA (Company Voluntary Agreement), and this money should have been paid to the CVA directly by the RFL (Rugby Football League) from allocations due to the Koukash company which owns Salford Red Devils, Salford City Reds (2013) Ltd.
However, the company handling the CVA Ideal Corporate Solutions (ICS) states there have been a "number of factors that had had a negative impact on the financial performance of the club". These include the dispute with the RFL over salary cap breaches which resulted in a six point penalty reduction last season and led to "an adverse effect on both corporate and gate sales together with the loss of some key sponsorship" states ICS.
ICS explains that, this season, performance both on and off the field `can be improved' by cuts to the budget for the playing squad, and cuts to the coaching staff, academy administration and office rental costs. There will also be investment in the "administrative and marketing sides of the club which have historically underperformed"... ICS adds that "This should act as a driver to greater turnover generation and corporate and financial compliance."
Thus the company recommended that "the monthly contributions payable under the terms of the CVA be suspended for a further period not exceeding 12 months and the period of the CVA be further extended for a period not exceeding 12 months, resulting in an overall term of 89 months..."
This means that the Council won't see at least a portion of what it's owed for at least another 7.4years. And according to previous reports, this is only 4/25ths of what it's owed, with the remainder spread until 2038, interest free (see previous Salford Star article click here).
If Salford City Mayor Paul Dennett is serious about transparency and openness within Salford City Council he would make all details of the Koukash dealings available to the public and press.
The notice of the decision to grant Koukash a further payment holiday puts the risk to the Council as "high".
* The latest accounts for Salford City Reds (2013) Ltd are, according to Companies House, "overdue".
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